Rosen Bridge vs. Interlay — An Analysis on Wrapping Bitcoin

anetaBTC on 2022-06-10

Rosen Bridge vs. Interlay — An Analysis on Wrapping Bitcoin

We are excited to release our analysis of two strategies for wrapping Bitcoin: Rosen Bridge and Interlay. The rest of this article will explore what to expect, and how to get involved with our community!


During the last couple of months, our core development team has been researching the best implementation strategies to securely provide the ability to wrap Bitcoin onto the Ergo Network. Based on our research, there are currently two strategies that appear to be the most secure and decentralized: the Ergo Platform’s Rosen Bridge and Polkadot’s Interlay.

In this article, we take a comprehensive look at the differences between the two bridging solutions and discuss the different benefits and tradeoffs associated with these different design implementations.

We have broken down our analysis into 4 different categories:

  1. High-level Overview
  2. Authentication
  3. Smart Contracts & Underlying technology
  4. Adding new chains


Rosen Bridge

Rosen Bridge is an Ergo-based bridge originally conceived by the members of the Ergo Foundation that places a high emphasis on security.

This bridge enables users to send and receive tokens between Ergo and any other chain that supports multi-signature transactions, such as Bitcoin. Rosen’s design utilizes a “Watchers” and “Guardians” model, where Watchers send transaction events from ChainY to Ergo, and Guardians sign the transactions on-chain. We will discuss this model in further detail below.


Interlay, which is the model the anetaBTC protocol is based on, is a bridging and wrapped assets solution born on Polkadot based on the XCLAIM protocol. Interlay aims to be a decentralized and trustless wrapping protocol, using a model involving relayers and vaults. The relayers “relay” the transaction from Bitcoin over to a BTC-parachain built on Polkadot, while the vaults store the BTC intended to be converted to a wrapped asset.


Rosen Bridge

The Rosen Bridge uses a robust 2-factor authentication mechanism to ensure that transactions on one chain are validated and subsequently registered on the Ergo chain. As previously mentioned, Rosen uses a method incorporating “Watchers” and “Guardians,” where off-chain Watchers function as the first layer of authentication, and on-chain Guardians perform the second layer of authentication. The Watchers act as the listeners for events happening on non-Ergo chains and will report these events from the bridged blockchains. Once these watchers reach consensus on a particular event, they send the message over to the Guardians. Anyone has the ability to be a Watcher.

The Guardians act as the second layer of on-chain authentication. Guardians are selected as important stakeholders in the Ergo community and are subject to the liability of a mistake. These guardians use an M / N multi-signature scheme to distribute their signing power.

What this means is that in order for the Rosen Bridge to be corrupted, at least M guardians would need to be corrupted as well, meaning the more elected Guardians there are, the more Guardians must be corrupt for the mechanism to fail. As Guardians are “trusted” members of the Ergo community, the security of the system should reflect this.

In this example, “trusted” members of the Ergo community may include teams with a track record of transparency such as ErgoDEX, ErgoPad, and Night Owl.


Interlay, however, takes a different approach and mimics the traditional BTC-relay in design.

Interlay’s method leverages 1FA authentication, where the authentication comes from a decentralized group of relayers submitting events that occur on the Bitcoin blockchain, to the BTC-Parachain that exists on Polkadot. Interlay is entirely trustless in this regard, meaning that anyone can elect to be a relayer.

As opposed to the Guardian’s multi-signature wallet holding Bitcoin, Interlay deals with interoperability by having Bitcoin stored in a decentralized vault system.

Anyone can choose to become a vault, as long as they provide enough collateral to cover the value of the assets in their vault, and thus ensure that they are a good actor in the ecosystem. If a vault acts maliciously (think stealing the Bitcoin that is sent to it), then its collateral is slashed, and the end-user gets reimbursed in multi-asset collateral at a beneficial rate.

Smart Contracts & Underlying technology

Rosen Bridge

The design of both Interlay and Rosen addresses an issue other blockchain bridging solutions are currently facing: the need to write smart contracts on two different chains. The consensus of any interaction is done strictly on Ergo so there is no need to utilize external smart contracts on other chains.

On one hand, this design entails higher security as there is less room for smart contracts to potentially be exploited as they are concentrated on one blockchain.

For Rosen Bridge, however, this method causes the protocol to heavily rely on the Watchers and Guardians to ensure reliable cross-chain information.


Similarly, Interlay’s smart contracts are only executed on one blockchain: Polkadot. Instead of relying on trusted members to ensure reliable cross-chain information, Interlay relies on decentralized vault operators who must contribute collateral to become a vault.

There are three different endpoint smart contracts that allow interBTC to exist on the Polkadot ecosystem (and the same endpoints for Rosen):

  1. Issue smart contract → allows the creation of Bitcoin-backed tokens, deemed as interBTC on the BTC Parachain.
  2. Transfer smart contract → allows the transfer of interBTC to others within the Polkadot ecosystem.
  3. Redeem smart contract → allows the burning of Bitcoin-backed tokens on the BTC Parachain and the reception of 1:1 of the amount of Bitcoin in return.

When transactions on the BTC mainchain are sent to Polkadot’s BTC Parachain, one of these contract endpoints is also specified. This triggers the smart contract to be executed on Polkadot, either to issue, transfer or redeem InterBTC. Interlay verifies the presence of a transaction on the BTC blockchain within the smart contract and therefore relies less on the trust of the Relayers compared to Rosen Bridge.

Adding new chains

Rosen Bridge

When talking about building a bridge between two blockchains, many folks default to thinking about a BTC-ChainX bridge (in this case, BTC-Ergo), but it’s important to keep in mind that we can also bridge ChainY-ChainX with a lot of existing bridge infrastructure. With Rosen, its design allows the ability to bridge other blockchains to Ergo with a few steps.

A new wallet must be configured on ChainY for the guards so that the assets from ChainY blockchain have somewhere to be held. Then, we need to spin up watchers to relay events from ChainY over to our guardians.


Interlay currently only bridges BTC to the Polkadot ecosystem, but they’ve included in their roadmap the ability to add more interoperability between the other ERC20 chains as well.


Overall, there are multiple tradeoffs when looking at the design of Rosen Bridge vs. Interlay.

The main difference between the two is the consensus mechanism for approving minting and redeeming. With the Rosen Bridge, a group of trusted actors known as Guardians and Watchers verify the requests to mint and burn. In the case of Interlay, however, anyone can become a vault by providing collateral to prevent malicious behavior.

Currently, we are developing Interlay’s implementation of the wrapping protocol because it allows anyone the freedom to run a vault, thus being a more decentralized design. Rosen Bridge, however, has a lot of potential in the future for wrapping as the Ergo ecosystem expands and evolves.

Final Remarks

Our growing development team at anetaBTC from around the world is hard at work developing vital infrastructure for the Cardano and Ergo ecosystem. We welcome members of our community to contribute to anetaBTC and related projects to help us see our combined vision through.

We sincerely thank each and every member of our community for their support. We will continue to update our community on development progress as we work towards a better future for all.

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